The BPF Responds to the Spring Statement 13 March 2019

The British Property Federation (BPF) Responds to the Chancellor of the Exchequer’s Spring Statement to House of Commons given on 13 March 2019.

Brexit uncertainty

Melanie Leech, Chief Executive of the British Property Federation, said:

“As the Chancellor rightly identified, the threat of a disruptive and damaging ‘no deal’ Brexit hangs over the UK economy, and removing that shadow from day-to-day investment decision-making is the singular most important challenge that Parliament must resolve.”

Government response to Land Value Capture proposals

Ian Fletcher, director of real estate policy, said:

“We have significant concerns around Land Value Capture, which threatens to hold back the delivery of new development and prevent the Government from meeting its target to deliver 300,000 homes-a-year. We are pleased that Government remains focused on existing land value capture measures, rather than adding new ones.”

Permitted Development Rights on the high street

Ian Fletcher, director of real estate policy, said:

“The property industry has supported some permitted development rights in the past, not least office to residential, and will continue to support sensible reform in this area.

“However, we are concerned that PDR proposals that allow building up on top of existing property, and that allow properties to be demolished and rebuilt, may not lead to well-planned places, and may be so complex to bring forward they simply resemble a planning application in all but name. Similarly, a PDR that allows hot food take-aways to be turned in to homes may lead to poor-quality development.

“The proposed flexibilities around change of ‘A’ class uses also need further careful consideration. High streets need a holistic and locally-driven approach and while greater flexibility within use classes would be welcome, each high street has different characteristics and different challenges, so our approach to planning on high streets has to be nuanced rather than a one-size-fits-all approach.

“We would rather see local councils engaging proactively in planning and adaptation and therefore we support much of the Government’s high street agenda, including the High Street Fund and Task Force. Greater use of compulsory purchase and local development orders is also something which local councils may need to deploy more and support for that is welcome. The extension of temporary use from two years to three, and the encouragement this might give to more community uses and would-be entrepreneurs, is also welcome.”

Investment in housing

Ian Fletcher, Director of Real Estate Policy at the British Property Federation, said:

“There are some welcome investment announcements in today’s Statement that allocate funding already earmarked for housing. The Housing Infrastructure Fund allocations of £717m will help unlock some important strategic sites. The first Affordable Housing Guarantee Scheme was a roaring success and we are pleased to see a further £3bn now confirmed.

Accelerated Planning Green Paper

Ian Fletcher, Director of Real Estate Policy at the British Property Federation, said:

“Speeding up planning is a laudable aim, but to do so will require additional capacity and capability within local authority planning departments.

“The development sector has tried to help meet this shortfall through higher planning application fees, which came into effect at the start of 2018, but it is also important that local government is properly funded and it desperately needs a more sustainable funding settlement as part of the forthcoming Spending Review.”

Post-Brexit Financial Services regulatory framework

Ian Fletcher, Director of Finance Policy at the British Property Federation, said:

“In the short term, the priority must be to provide certainty to overseas investors in UK real estate that the ‘rules of engagement’ will not change overnight. In the longer term, the question will really be ‘to what extent does the UK continue to align its financial regulation with the EU?’ This will depend on whether the UK wishes to be recognised as having an ‘equivalent’ regime to the EU, to which the answer must surely be ‘yes’ – at least until the future of the UK’s broader relationship with the EU is clearer. However, this means the UK will probably be in the position of ‘rule-taker’ for the foreseeable future, which may cause political tension.”

Biodiversity net gain in new development

Ian Fletcher, Director of Real Estate Policy, said:

“We support the Government’s proposals for mandating Biodiversity Net Gain through the planning and development process. This is an opportunity to preserve and enhance the UK’s natural environment, and while we would like to see significant gains by way of biodiversity, we must ensure that the proposals are achievable and viable across the spectrum of developments that contribute greatly to the country’s continued growth.”

Future Homes Standard

Ian Fletcher, Director of Real Estate Policy, said:

“The real estate sector has made significant progress in improving the environmental performance of the UK’s built environment in recent years. To make further progress we will need to work in partnership with Government to acknowledge what has and hasn’t worked in the past. While we welcome the Chancellors announcement of a new Future Homes Standard to be introduced by 2025, we would highlight the significant challenges facing the UK’s existing building stock and encourage the Government to consider associated funding mechanisms in light of Green Deal financing no longer being available.”

Future of Mobility: Urban Strategy

Melanie Leech, Chief Executive, British Property Federation, said:

“Self-driving and electric vehicles offer opportunities to address problems such as air quality and the provision of enhanced mobility to urban places without the necessity of owning a car, as well as providing insights through connected mobility data on consumer habits and demographics. We look forward to responding to this consultation.

“As our research in the Liquid Report and Lost in Translation showed, digital models of buildings and cities can elicit significant benefits in terms of ensuring that the UK real estate sector can capture the benefits of advances in technology, and these benefits extend beyond just the construction and real estate sectors to touch all aspects of the economy.”

Allocation of £200m in infrastructure to support our world-leading scientists, innovators and industry

Melanie Leech, Chief Executive, British Property Federation, said:

“More spending for R&D is to be welcomed, particularly when these concern grand challenges such as AI. However, as the Liquid Report released last week indicated, there is a greater need for real estate-focused innovation competitions and research. There are particular challenges that are common across many real estate companies, such as data sharing, that would benefit from Government’s role as convenor and arbiter.”